Warehouse Lines of Credit: Drafting Financing Agreements, Custodial Agreements, Reps and Warranties
Perfecting a Security Interest in Mortgage Loans, Analyzing Repurchase Obligations, Bankruptcy Treatment Under Financing Agreements
Recording of a 90-minute premium CLE video webinar with Q&A
This CLE program will examine how a warehouse line of credit is documented between a mortgage loan originator and its warehouse lender, the representations and warranties made by the loan originator, and the remedies for breaches. The panel will also discuss the perfection of the lender's security interest in the mortgage collateral and how the bankruptcy of the loan originator impacts the lender's interest.
- Importance of warehouse lines in the funding of residential and commercial mortgage loans
- Financing agreements
- Parties: buyer (lender) and seller (borrower/loan originator)
- Conditions to funding: underwriting and legal requirements
- Eligibility criteria and representations and warranties
- Mark-to-market and margin calls
- Repurchase obligations
- Other issues
- Custodial agreements: the perfection of the security interest created under the financing agreement
- Delivery of mortgage documents as collateral
- Trust receipt from the custodian
- Release of mortgage documents upon repayment of the warehouse line
- Treatment of the financing agreement and collateral in the event of bankruptcy of the loan originator
The panel will review these and other critical issues:
- What is a warehouse line of credit, and how is it documented?
- How is the security interest of the buyer/lender documented and perfected under the financing agreement and the custodial agreement?
- What are the standard eligibility criteria and representations and warranties required of the loan seller, and are they negotiable?
- How are mortgage loan repurchase obligations and other remedies triggered and enforced under the financing agreement?
- How is the financing agreement treated in a bankruptcy of the seller/borrower? What about a third-party mortgage loan sub-servicer?
Jon H. Ruiss, Jr.
Alston & Bird
Mr. Ruiss is a partner with Alston & Bird’s Finance Group. He counsels investment banks and other financial... | Read More
Mr. Ruiss is a partner with Alston & Bird’s Finance Group. He counsels investment banks and other financial institutions on the purchase, sale, and financing of mortgage loans (residential, commercial, and multifamily), mezzanine loans, single family rental properties, and other mortgage assets. Mr. Ruiss’ clients lean on him to provide exceptional service in negotiating a diverse array of financing arrangements including master repurchase agreements, term loan facilities, and syndicated financing. Mr. Ruiss is also a certified public accountant and was previously an auditor at a global public accounting firm. As an auditor, his clients ranged from financial institutions to not-for-profit entities.Close
John E. Stoner
Stoner Fox Law Group
Mr. Stoner represents buyers/lenders and sellers/borrowers in warehousing and other funding facilities relating to... | Read More
Mr. Stoner represents buyers/lenders and sellers/borrowers in warehousing and other funding facilities relating to residential and commercial mortgage loans, servicing rights and other financial assets. He also represents buyers and sellers of residential and commercial mortgage loans and servicing rights and mortgage crowd-funding platforms. He has extensive experience in dealing with the legal and regulatory issues related to warehouse facility structures and was one of the primary attorneys involved in HUD’s analysis of related ERISA issues.Close